Good comment at Brad DeLong's
«I've frequently heard something like "Education is the best single factor deciding lifetime earnings". So if we want to increase equality, we should promote education,»
This is just a way of saying that income inequality depends on objective factors, and since people with less education tend to be ashamed of that, it is a way of making them feel guilty for being poorer.
«If education is being used as a selector, then increasing the educational level of the populace will just raise the bar.»
Well, one could advance the idea that rewards flow to the top 5%, irrespective of the absolute educational level. Let's look at graduates...
When only 5% of the population got a degree, 100% of graduates had it very good, as their degree had scarcity value.
Now that 40-50% of the population has a degree, not having one sucks; but having one is not awesome either, unless it is from the same institutions (Ivy league, Oxbridge) that graduate the top 5%, and once granted all degrees...
Mass education as you say does not much affect the _distribution_ of the pie, because it does not much change the bargaining power of employees vs. employers. It does not even affect much the absolute level of compensation, according to the data, as all productivity gains go to asset holders (and the top 1% of income earners are really asset holders).
More education has sure and immediate costs and uncertain (for those not in the top 5%) and long term benefits. Then what matters is who captures the benefits if any...
With mass education the benefits are largely captured by _employers_, because increased competition among employees reduces the scarcity value and pricing power of ''bulk headcount'' credentials.
Mass education also has wonderful side effects: it considerably reduces the reported rate of unemployment (a very important factor for many OECD governments), and makes employees more desperate to get a job and afraid of losing it because of university debt.
No wonder that the ''more education'' line is so common among certain advocates...
As to productivity, a good high school education is usually all that's needed to obtain the productivity benefits in a modern economy. Degrees are really only necessary for the professions and for access to the elite jobs.
Posted by: Blissex | July 16, 2006 at 07:34 AM
This is just a way of saying that income inequality depends on objective factors, and since people with less education tend to be ashamed of that, it is a way of making them feel guilty for being poorer.
«If education is being used as a selector, then increasing the educational level of the populace will just raise the bar.»
Well, one could advance the idea that rewards flow to the top 5%, irrespective of the absolute educational level. Let's look at graduates...
When only 5% of the population got a degree, 100% of graduates had it very good, as their degree had scarcity value.
Now that 40-50% of the population has a degree, not having one sucks; but having one is not awesome either, unless it is from the same institutions (Ivy league, Oxbridge) that graduate the top 5%, and once granted all degrees...
Mass education as you say does not much affect the _distribution_ of the pie, because it does not much change the bargaining power of employees vs. employers. It does not even affect much the absolute level of compensation, according to the data, as all productivity gains go to asset holders (and the top 1% of income earners are really asset holders).
More education has sure and immediate costs and uncertain (for those not in the top 5%) and long term benefits. Then what matters is who captures the benefits if any...
With mass education the benefits are largely captured by _employers_, because increased competition among employees reduces the scarcity value and pricing power of ''bulk headcount'' credentials.
Mass education also has wonderful side effects: it considerably reduces the reported rate of unemployment (a very important factor for many OECD governments), and makes employees more desperate to get a job and afraid of losing it because of university debt.
No wonder that the ''more education'' line is so common among certain advocates...
As to productivity, a good high school education is usually all that's needed to obtain the productivity benefits in a modern economy. Degrees are really only necessary for the professions and for access to the elite jobs.
Posted by: Blissex | July 16, 2006 at 07:34 AM
posted by ArcadesProjector at
5:46 PM
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